entrepreneurship ch 1-14
Promoting brand loyalty becomes essential in the ______ stage of the product life cycle.
maturity
The _______ compares total debt to total equity.
debt-to-equity ratio
Which of the following gives you the right to engage in an activity as long as the document is valid?
A license
_____ is a method that analyzes the underlying value of a business's assets as a basis for negotiating a price.
Asset valuation
Which of the following is the set of actions that produce goods and services?
Operations
Which of the following is NOT one of the eight quality-management principles for organizational improvement presented in the text?
Operations approach to management
Which of the following is shown in a quick ratio?
The ability to pay current debt with cash on hand
Which of the following is the benefit of establishing a trademark for your product?
To create instant brand recognition
How much cash reserve should a start-up have?
at least half the start-up costs
What should be the goal for location, facility, and layout decisions for web-based businesses?
Minimize distribution costs
According to the text, which of the following statements is true?
Smart marketers emphasize product benefits instead of features.
Which of the following phrases refers to the direct reduction of taxes?
Tax credit
Which topic area does the interview question "How do you think the people you work with would describe you?" relate to?
Teamwork
The ________ method of compensation refers to a fixed amount of money paid at set intervals
salary
How much would an investment of $1,000 invested at 10 percent per year for 2 years yield
$1,210
Most large companies are _______ corporations, and sell ownership as shares of stock.
C
Which type of institutions are for-profit corporations that provide capital to rebuild economically distressed communities through targeted lending and investing?
Community Development Banks
Which section of the business plan identifies the legal form of the business?
Company Description
Beach Bake, a maker of a new hair lightening product that is activated by sunlight and saltwater, wants to take a patent out on its invention. About how long should the company expect to wait before it obtains the patent?
Two years
Which type of social entrepreneurship invests directly in business enterprises with the goal of encouraging entrepreneurial approaches to achieve social impact rather than monetary returns?
Venture philanthropy
________ refers to an inventory-management method in which an individual assesses the stock level on hand by visual inspection and reorders when the supply appears low.
Visual control
The ability to finance a business with debt is based on the _____ of the business and its owner.
creditworthiness
A review that addresses the roles of the community, region, nation, or the rest of the world as they relate to a business is called a(n) _______.
environmental analysis
Which statement is true of a business plan?
A business plan is used to analyze markets and opportunities in realistic terms before securing financing.
________ is the ability to borrow money
Credit
Which of the following is NOT a long-term asset?
supplies
Which of the following is an example of primary research?
Written surveys
Financing a business by creatively stretching existing capital as far as possible, including the use of the entrepreneur's time, is called ______.
bootstrap financing
Travel Now, a new last-minute travel agency, wants to generate some publicity and provide the "who, what, when, where, why, and how" details of the company. Travel Now should_____.
issue a press release
According to the text, a firm can profitably license its brand when ________.
it has a core group of loyal customers
Offering a product for a lower price during the early stages of the life cycle in order to gain market share is referred to as _____.
penetration pricing
The simplest way to determine a promotional budget is __________.
percentage of sales
Bob started his company, Big Drain Excavations, last year. Bob wants to ensure that his employees are fully committed to the organization and that he has a good retirement plan in place for them. Which harvest strategy should Bob follow?
ESOP
Which of the following statements is NOT true of industry research?
It focuses on individual consumers.
According to the text, which type of advertising is more common for small entrepreneurial companies?
Product advertising
________ refers to the level of threat of loss that an individual is willing to sustain.
Risk tolerance
In which legal structure do all profits belong to the owner?
Sole proprietorship
A disadvantage of the _____ harvesting strategy is that it takes a long time to complete because you need to reinvest cash in the business to make it grow.
increase the free cash flow
Nike's "Just Do It" advertising is an example of ______.
marketing
Peter Drucker argued that for a business to be considered entrepreneurial it ___.
should exploit changes in the world
The term of a patent is generally _______.
twenty years
Expenses that vary directly with changes in the production or sales volume are called _____ costs.
variable
"What's the bottom line?" refers to ______.
whether a business has made a profit
Suppose your company has a burn rate of $10,000 per month. If you have $20,000 in cash and are making $2,000 per month in sales, how long can your company hold out?
2.2 months
According to the text, which statement is NOT true of business plans?
Business plans identify the competitive advantages of the future.
In which way can an entrepreneur utilize trade or professional associations to determine the value of a business?
By using industry benchmarks
_______ refers to accessing cash for your business in exchange for offering a company the rights to the cash that will be collected from your customers.
Factoring
Which type of document summarizes income and expense activity over a specified period and shows net profit or loss?
Income statement
Which of the following statements is NOT true of income statement ratios?
Income statement ratios are created by dividing sales into each line item and multiplying by 10.
__________—who sellmultiple, non-competing product lines within a specific industry or geographical area— can be used to quickly build a national presence while keeping commission as a variable cost
Independent sales representatives
According to the text, which of the following is NOT recommended as part of good financial record keeping for your business?
Use cash for business whenever possible
Which of the following is a key difference between harvesting and replicating a company?
When a business is harvested, the owner leaves the business in exchange for cash or stock.
Which of the following terms BEST describes total sales revenue minus total cost of goods sold?
gross profit
_________ is a variable cost of doing business.
labor
Burger King's "Have It Your Way" campaign is an example of ______.
market positioning
The amount of inventory, raw materials, or works-in-progress that is kept to guarantee service levels is known as __________.
safety stock
What type of research is carried out indirectly through existing resources?
secondary
According to recent research, ______ of new small firms survive for five or more years.
45%
Which of the following is a debt that is to be paid over a period of more than one year?
Long-term liability
Which country requires cash flow statements ONLY for large companies?
United Kingdom
An entrepreneur who receives a percentage of the value of a sale is being paid ______.
a commission
Most business owners must carry _____insurance to reimburse employees for loss of income and medical expenses if they are injured on the job.
workers' compensation
Which of the following best describes the person or organization that is owed money?
Creditor
Suppose your business requires a start-up investment of $1,000. The business is projecting a new cash flow per month of $400. How many months will it take for you to make back your start-up investment?
2.5 months
What is net income divided by sales?
A. Profit margin
You have been hired to help Buy Now improve its customer service. Some managers at Buy Now are skeptical of the value of investing in customer service. Which of the following facts might convince them that customer service really is important?
About 65% of a company's business comes from existing customers
Which of the following statements is true of the law of agency?
All individuals carrying out the work of a corporation are agents.
How is depreciation shown on a balance sheet?
As a subtraction from assets
Which statement about negotiating payment is correct?
As you become an increasingly significant customer for your vendor, you can renegotiate payment terms.
In which step of the sales call should you offer discounts or other incentives to customers who help identify other potential customers for you?
Asking for references
Which of the following is a disadvantage of the Internet as an advertising media?
Banner ads feed click-throughs to full ads
Which principle of selling will help a salesperson make a good personal impression?
Be clean and well dressed.
Which of the following is the market segment where brand loyalty or responsiveness to price is observed?
Behavioral
Which of the Five C's of Credit is determined by the cash flow of the business and its ability to cover loan payments and other expenses?
Capacity
Which of the following statements about the income statement is NOT true
Cash and profit are the same.
Which of the following is created when there is a circumstance in which there is a conflict of values, which muddies decision making?
Ethical dilemma
Which statement about franchising is true?
Franchises fail less often than fully independent businesses.
Suppose a company wants to expand its market presence, but only has minimal capital available to invest. What option would you recommend based on what you have learned in this chapter?
Franchising
Which of the following is NOT an example of advertising?
Free mention of an event in a newscast
Which of the following is NOT a question to ask before making an appointment for a sales call
How should I advertise the product
The family of standards for quality management systems established by the International Organization for Standardization is _______.
ISO 9000
Products Unlimited wants to learn more about the marketing strategies and promotion patterns of competitors. What type of research would be the best option for the company?
Tracking
Which of the following factors is the most influential regarding choice of location and distribution systems?
Type of business
Why is cash essential to a business?
Without cash on hand, you will not be able to pay necessary expenses.
Which of the following is the correct formula for working capital?
Working Capital = Current Assets − Current Liabilities
What type of information should be included in your exit strategy when presenting to potential investors?
Your business plan should spell out in how many years you expect them to be able to cash out.
The primary methods of calculating the value of a business are ____________.
asset valuation, earnings valuation, and cash flow valuation
_______ refers to business equipment that is expected to last a year or more.
capital equipment
Which document provides a snapshot of your business?
balance sheet
The factors that contribute to the ease or difficulty of a new competitor joining an established market are known as _________.
barriers to entry
Which accounting method is a system wherein transactions are recorded when cash is paid out or received?
cash accounting method
A method of calculating the worth of a business by using projected future cash flows and the time value of money is called ______ valuation.
cash flow
Another term for population statistics is _______.
demographics
Before meeting with bankers and other potential investors, entrepreneurs should __.
develop a business plan
Employees who actively produce or deliver a product or service are called _______.
direct labor
The addition of product or service offerings beyond a business's core product or service is referred to as ______.
diversification
A promotion that combines education and entertainment to make a more lasting impression upon an audience is called _______.
edutainment
A(n) ______ is a 30-second to 2-minute presentation that conveys in an engaging way what a business is proposing and why the listener should be interested.
elevator pitch
A(n) _________ is someone who recognizes an opportunity to start a business that other people may not have noticed and acts on it.
entrepreneur
According to the Customer Service Institute, it costs about _____ times as much to attract a new customer as it does to keep an existing one satisfied.
five
The relative value of one currency to another is called the _______.
foreign exchange rate
The _______ is a statement of performance and acts as the scorecard for the entrepreneur.
income statement
In a free-market system, ____.
individuals and companies may compete for their own economic gains
The _______ harvest strategy involves selling shares of your company in the stock market.
initial public offering
At which stage of the product life cycle are modifications to the design or technology made?
introduction
Until the product is sold, expenses associated with materials and direct labor for production are referred to as ______.
inventory costs
Identification of the knowledge, skills, and abilities required to perform the specific tasks of an employment position is referred to as a(n) ________.
job profile
When a company is financed by debt, as opposed to equity, we say that it is ______.
leveraged
Debts a company has that must be paid show up as _____ on a balance sheet.
liabilities
Any funds you have borrowed to start or operate the business are referred to as ______.
loans
A(n) ________ is a trusted advisor with whom a person forms a developmental partnership through which information, insight, skills, and knowledge are shared to promote personal and/or professional growth.
mentor
A(n)________ refers to the joining of two companies in order to share their respective strengths.
merger
A _______ is a concise communication of strategy, including a business definition and an explanation of competitive advantage.
mission
As compared to typical products, fad products move ______ through the product life cycle.
more quickly
Which of the following is a secondary research method?
online searches
A business with two or more owners who make decisions for the business together and share the profits, losses, assets, and liabilities is referred to as a(n) _______.
partnership
An exclusive right, granted by the government, to produce, use, and sell an invention or process, is known as a ______.
patent
The estimated time required to earn sufficient net cash flow to cover the start-up investment in a business is called the ______.
payback period
Another term for start-up investment is_____.
seed capital
Undercover or deceptive marketing efforts that are intended to appear as if they happened naturally are referred to as ________.
stealth marketing
According to Michael Porter, a supplier has the least power when __________.
substitutes are readily available
When a company advertises "more for less" and balances quality and price, the company is using a _____ pricing approach.
value
An investor or investment company whose specialty is financing new, high-potential entrepreneurial companies and second stage companies is known as a(n) ______.
venture capitalist
______refers to the value of assets owned minus the value of liabilities owed.
wealth
Market research is the process of finding out all of the following EXCEPT ______.
what the optimal production locations are
The term for money when it is exchanged internationally is _______.
currency
In which building block of the Osterwalder-Pigneur Business Model Canvas are economies of scale and economies of scope relevant?
Cost Structure
Which section of the business plan is designed to hook potential investors and encourage them to read the rest of the business plan?
Executive Summary
Which type of analysis provides a critical view of industry definition, industry size and growth (or decline), product and industry life cycle, and any current or anticipated legal or regulatory concerns?
Industry analysis
Which method of asset valuation establishes a minimum value for a firm?
Liquidation value
What describes the rate of failure for a new business venture?
One in five new businesses fails within the first eight years.
Which of the following BEST represents a mission statement?
Our goal is to honor and empower wounded warriors.
Which element of a business definition addresses receiving payment?
Production and delivery capability
The act of giving up one thing for another is called _____.
a trade-off
A company's plan to generate revenue and make a profit from operations is referred to as a(n) ________.
business model
Money or property owned or used in business is called _____.
capital
Which of the following is NOT an industry force identified by Michael Porter?
future comparative advantage
The first offering of corporate stock to investors on the open (public) market is referred to as a(n)__________.
initial public offering
Joseph Schumpeter expanded Say's definition of entrepreneurship by suggesting that _____.
innovation is the key to entrepreneurship
Offering a clear and compelling vision for the organization that inspires others to commit to it is referred to as _____.
leadership
Which of the following describes a hypothesis-driven approach to business startups that includes iterative development?
lean startup
A trusted advisor with whom a person forms a developmental partnership through which information, insight, skills, and knowledge are shared to promote personal and/or professional growth is known as a ______.
mentor
The value of what must be given up in order to obtain something else is called ______.
opportunity cost
An entrepreneur recognizes ________ where other people see only ________.
opportunity; problems
According to the text, it is important to write a business plan before starting a business in order to _______.
organize the entrepreneur's thoughts
The amount of earnings remaining after all costs are deducted from the income of a business is called ______.
profit
A company's _________ refers to the distinctive features and benefits that set the company apart from the competition.
unique selling proposition
A transaction between two parties who willingly agree to trade money for a product or service is referred to as _____ exchange.
voluntary
The Lean Startup approach _____.
works to ensure product-market fit
Which customer segment in the Osterwalder-Pigneur Business Model Canvas is composed of all the supplier and customer segments that are served?
Multi-sided markets
Which of the following is NOT a potential benefit of entrepreneurship?
Dependency
Which of the following is the practice of learning as much about purchasing an existing business as you possibly can before the purchase decision is made?
Due diligence
The _____ section of a business plan answers the who, what, when, why, and how questions for the business.
Executive Summary
Which of the following is NOT one of the "five roots of opportunity"?
Implementation of new organizational designs
According to the text, the ______ method of valuation is less likely to be used for an entrepreneurial venture.
cash flow
A(n) _____ is a financial statement showing cash receipts less cash disbursements for a business over a period of time.
cash flow statement
When managers plan and create steps towards a specific goal which is based on cause and effect, they are engaging in _____.
causal logic
The principles of entrepreneurship ________.
relate to all aspect of life
The basic unit of the product or service sold by a business is referred to as the _____.
unit of sale
A company that is constantly matching or undercutting the prices of the competition is using a _______ approach to pricing.
meet-or-beat the competition
_____ are measurements of the key drivers of a start-up business that guide informed decisions and steps.
Actionable metrics
According to the text, which method of asset valuation generally excludes intangible assets?
Adjusted book value
If a company emphasizes paid promotions using media outlets, such as radio and magazines, which type promotion is the company focusing on?
Advertising
ShoesRUs is trying to define its target market for its new running shoe. Which of the following statements is the BEST definition of a target market for the company?
All runners in the United States
Which of the following best describes a problem driven approach to a business opportunity decision process?
An entrepreneur has an idea for a product and searches for a market
Which of the following statements is correct regarding ideas and opportunities?
An opportunity has a unique characteristic that distinguishes it from an ordinary idea.
_______ are individuals who recognize opportunities and organize and manage a business, assuming the risk for the sake of potential return.
Entrepreneurs
Which element of a business plan provides a snapshot of the business?
Executive Summary
Which of the following is generally the strongest force in an industry?
Existing competitive rivalry
Which of the following is NOT part of a business plan?
a detailed description of the founders' abilities and experiences
A brief, written statement that informs customers and employees what an organization's goal is and describes the strategy and tactics to meet it is referred to as ______.
a mission statement
The plan for how an organization or individual intends to outperform competitors is known as ______.
a strategy
If an entrepreneur wants to analyze the cost of producing a tangible item, he or she should look at the ________.
cost of goods sold
The U.S. Small Business Association defines a small business as having ____ employees and selling ______ worth of products or services annually.
fewer than 500, less than $5 million
A _____ is defined as a business with five or fewer employees, initial capitalization requirements of less than $50,000, and habitual operational involvement of the owner
microenterprise
What is the sign that the entrepreneur has added value to the resources he or she is using?
profit
Which of the following is NOT a factor that creates competitive advantage?
profit
Which of the following is NOT an advantage of listing your trademark on the USPTO?
It automatically provides trademark protection in the 28 members of the European Union.
Which type of corporation is set up with a specific mission to improve society rather than for shareholder gain?
A nonprofit corporation
A standard format for a specific type of legal agreement is known as ______.
boilerplate language
The most common and the simplest way to value companies is _______.
book value
Which of the following is an example of variable costs?
cost of goods sold
Those principles that define a code of behavior to distinguish between good and bad or right and wrong are referred to as _____.
ethics
Which type of pricing approach uses a predetermined percentage applied to a product's cost to obtain its selling price?
markup
A person or organization that may be receptive to a sales pitch is a ______
prospect
A ____ refers to a model or pattern that serves as an example of how a product would look and operate if it were produced.
prototype
If a newspaper writes an article about your business, it is _______.
publicity
The U.S. government requires businesses to pay self-employment taxes ______.
quarterly
The _______ ratio measures the average number of days that it takes for credit sales to be collected.
receivables turnover
The first function of a cash flow statement is to ______.
record all sources of income
A(n) _________ refers to the level at which materials should be ordered again to prevent delays in production.
reorder point
A _________ strategy is a way for a business to obtain money by letting others copy its successful formula for a fee.
replication
When you want to learn about your industry, competition, or markets, which type of research is generally best?
secondary
Which approach to valuation is based on the price/earnings ratios of comparable public companies?
Market-based value
Which source of business capital is raised by matching individual lenders to individual borrowers and organizations?
Peer-to-peer
______ refers to the federal tax that business owners are assessed on wages paid to themselves.
Self-employment tax
Which of the following is NOT true of store layout?
Well-designed stores usually place their check-out registers near the entrance doors.
Which of the following BEST describes the price at which a property or business is valued by the marketplace?
Fair market value
What is the first step in forecasting cash flow receipts?
Project cash receipts from all possible sources
According to TARP Worldwide's study of negative word-of-mouth, about _____ of consumers who hear a negative word-of-mouth stop buying the product.
42%
Which of the following BEST defines a sole proprietorship?
A business owned by one person which often has no other employees.
Will Wiley and Chris Cheetum just received their law degrees and want to set up a practice together. Which type of corporation would you recommend to them if they want to ensure that each individual is protected from the negligence of the group?
A professional corporation
What is the common rule of thumb for determining the value during the acquisition of a small business?
A small business should be worth at least three times its annual net profit.
In which step of the recruiting process does identifying pertinent skills and determining ways to evaluate them take place?
Assessing skills
ABC Company anticipates start-up costs of $4,600. How much should the company keep in reserves?
At least $2,300
Under which type of leadership are employees encouraged to figure out how to achieve the goals stated by the leader?
Authoritative
A(n)________ explicitly includes an environmental benefit in its charter, in addition to profitability as a goal.
B corporation
Double taxation is a disadvantage of which type of legal structure?
C corporation
Joseph Schumpeter described five basic ways that entrepreneurs can find opportunities to create new business? Which of the following is NOT included in Schumpeter's definition?
Carrying on a family business tradition
Which of the following should be prepared monthly and provide a concise, easy to read and understand picture of a company's financial picture?
Cash flow statements
Which of the following statements regarding the role of cash in a business is true?
Cash is essential for operations and growth.
_____ calculate the best location for a single distribution point serving multiple outlets based upon relative costs.
Center-of-gravity methods
Which type of bankruptcy allows the business to continue to operate while paying off debt?
Chapter 11
Beach Bake, a small maker of a new sunscreen, needs financing to build a warehouse. The owner wants to avoid personal loans. What type of financing would you recommend?
Commercial
What type of business financing is typically provided by a bank or other financial institution?
Commercial loan
Which of the following is NOT included in the salaries category of fixed expenses?
Commissioned sales reps
Which business financing source provides funds to be used to rebuild communities through targeted lending?
Community development banks
Which of the following should be counted as an asset in a seed capital estimate for a 24-hour fitness center?
Computers and other technology
The five Cs of credit include collateral, character, capacity, capital, and ______.
Conditions
How can a small business profit from the ideas, suggestions, and complaints of present and former customers?
Conduct a satisfaction survey
In the production-distribution chain, who receives a product from the manufacturer when a factory direct method is used?
Consumer
Bob started his company, Big Drain Excavations, last year. Bob believes that the key to success in his industry is quality. He heard about an approach to quality that involves always identifying and implementing changes throughout the organization to focus on the requirements of internal and external customers. What approach is Bob considering implementing?
Continuous improvement
Which of the following is the managerial task of measuring the business's performance and determining how to improve it?
Controlling
Sell More Now is training its salespeople. Today's instruction is on how to make a sales call. Which step in the eight-step sales call method requires listening to and responding to concerns of the customer?
Dealing with objections
_____ refers to the amount a borrower is obligated to pay in a given period until a loan is repaid.
Debt service
Which of the following exit strategies allows the owner to borrow money and reduce the interest due over time by offering ownership shares in exchange for the debt?
Debt/equity exchange
_______ refers to the results of a borrower failing to meet the repayment agreement on a debt
Default
Which type of market segmentation involves dividing a population based on a variable such as age or gender?
Demographic
__________ are expenses that remain constant and must be paid regardless of whether sales are generated.
Fixed costs
Which of the following BEST describes breakeven?
Fixed costs are covered by sales but no profit has been made
Which of the following statements regarding fixed operating costs is NOT true?
Fixed operating costs do not change over time.
Which of the following businesses is likely to have sharp variations in the cash flow cycle?
Flower store
Which earnings valuation method is likely to establish the upper limit of what a buyer is willing to pay?
Future earnings under new ownership
_______ refers to the amount a sum of money will be worth over time through investments
Future value
Which term BEST describes business activities that avoid harm to the environment or help to protect it in some way?
Green entrepreneurship
Beach Bake, a maker of a new sunscreen, wants to know how long it can hold out before it will run into a negative cash situation. How should the company calculate the number of months it has left?
It should calculate the burn rate by dividing (cash available + revenue) by negative cash outflow per month.
Understanding the product's features and the benefits they can create is part of which principle of selling?
Know your product or service
Which of the following is one of the options when implementing a growth strategy for your business?
Lead through the growth.
Which of the following is a disadvantage of debt financing?
Lenders expect regular financial reporting and compliance with the loan contracts.
Which of the following represents the sale of all assets of a business concurrent with its being closed?
Liquidation
In which step of a SWOT analysis should an entrepreneur consider external events or circumstance that can help the entrepreneur gain an advantage over the competition?
Opportunities
Which type of leader sets high personal performance standards and challenges employees to meet them?
Pacesetting
Which of the following is used to determine the time needed to earn back initial disbursements?
Payback period
Which method of determining a promotional budget involves spending more when you're selling more?
Percentage of sales
According to the text, which of the following rules should companies follow to increase cash flow?
Plan ahead for seasonal or contractual needs by financing early.
Which type of debt equity used by a public corporation pays a fixed dividend to investors, often paid quarterly?
Preferred stock
_______ refers to what the future amount of an asset or other investment is worth at face value, discounted back to the present.
Present value
What type of payment system is described in the text as a fixed payment made at regular intervals, such as every week or every month?
Salary
According to the text, which of the following is NOT a common category of fixed expenses?
Sales commission
_________ refers to an assessment levied by governments on purchases and collected by merchants.
Sales tax
Which of the following statements is NOT correct regarding cash flow and taxes?
Self-employment taxes are paid monthly.
According to the text, where do a person's leadership skills come from?
Self-esteem applied to knowledge, skills, and abilities
There are several ways to grow and eventually exit from your business. In which strategy would you merge with another firm as part of your exit strategy?
Sell to others
The ________ is a "pass-through" entity for tax purposes because corporate income is only taxed once as the personal income of all owners.
Subchapter S corporation
Which type of corporation limits its number of stockholders to 100?
Subchapter S corporations
Which of the following best defines the art of sourcing, procuring, production, and logistics to move products from raw materials to end consumers?
Supply chain management
_________ refers to a scenario in which current needs are met while preserving future resources.
Sustainability
You are opening a hot dog stand. According to the text, which of the following is NOT a typical start-up cost for your new business?
Television advertisements
Beach Bake, a maker of a new hair lightening product that is activated by sunlight and saltwater, is going through the resumes it has received in response to the new position it posted. One applicant is 47 years old, significantly older than the rest of the group. What Act might this applicant be covered under?
The Age Discrimination in Employment Act
When developing an initial public offering, who ultimately decides the value of the company?
The market
Coco started her company, Big Drain Excavations, last year. She is the sole owner, and is trying to understand the company's Social Security tax obligations. In particular, she needs to know when taxes must be paid. What will you tell Coco?
They must be paid quarterly.
According to the text, what is the common mistake made by many inexperienced sales people?
Thinking that an emphasis on product features will sell the product
Logos are registered with the ________ to protect them from being used by others.
U.S. Patent and Trademark Office
Which of the following is NOT an advantage of a sole proprietorship?
Unlimited personal liability
Which of the following are a fixed cost of doing business?
Utilities
The accounting method wherein transactions are recorded at the time of occurrence, regardless of the transfer of cash, is called the ______ method.
accural
According to French economist Jean-Baptiste Say, entrepreneurs ________.
add value to scare resources
Another name for word-of-mouth marketing is ______.
buzz marketing
All other things being equal, a company with negative working capital ________.
cannot spend the money to bring a new product to market
According to the cash flow equation, variable costs, fixed costs, and taxes are considered to be _____.
cash outflows
Emergency funds and a pool of cash resources are referred to as _________.
cash reserves
An organization that collects, analyzes, and resells information supplied by financial institutions and others who extend credit is referred to as a(an) ________.
credit reporting agency
The beliefs, values, and behavioral norms of an organization are known as its _______.
culture
A study to assist in making the go/no go decision based on a close examination of product/service, market, industry, and financial data is called a(n) __________.
feasibility analysis
A _______ is typically offered by governments and can capture, store, manipulate, analyze, and present all types of data based on demographics.
geographic information system
Net revenues minus cost of goods sold equals ______.
gross profit
A(n) _______ is a business partnership wherein there is a general partner with unlimited liability, and one or more limited partners with no official input in daily operations and limited liability.
limited partnership
Over the last three decades, Summer Sizzle, a lemon-based lightly carbonated water, has maintained a strong position in its regional market. The company is considering expanding its offerings to include an Italian ice using the same basic flavoring. If the company goes ahead with this plan, it can best be considered an example of _______.
line extension
Community Development Loan Funds offer four main types of loan funds including all of the following except _____.
macroenterprise
Adjustments to asset values not involving cash, such as depreciation and amortization, are referred to as ______.
noncash expenses
A company that uses secret shoppers is using ___________ as a research approach.
observation
Current liabilities are debts that are scheduled for payment within _____.
one year
Distinguishing a product or service from similar products or services being offered to the same market refers to _______.
positioning
If you conduct 100 interviews with students on your campus, what type of research have you completed?
primary
The measurement, monitoring, and optimization of tasks is referred to as ___________.
process management
Which of the following is NOT one of the traditional four Ps of marketing?
production
The term for unwanted Internet advertisements or emails is ______.
spam
The number of direct reports for a manager or supervisor is their _____.
span of control
According to marketing expert Al Ries, a big disadvantage of diversification as a growth strategy is that _________.
the company loses focus which leads to a loss of power
What is opportunity cost?
the value of what must be given up to obtain something else
Michael Porter argues that buyers have the most power when __________.
they are concentrated
The quality-assurance methodology of striving for strategic advantage through quality is known as _______.
total quality management
An elevator pitch should be about ________ long.
30 seconds to 2 minutes
According to Michael Porter, which of the following is NOT one of the key aspects of intense rivalry?
An industry experiencing fast growth
According to the text, which statement most accurately describes business plans?
Business plans should provide as much detail as possible on how investments will be used.
According to the text, which of the following is NOT a guideline for business plans?
Use historical data and reports for your industry.
Which of the following refers to the cost of the direct labor used plus the cost of delivering a service?
cost of services sold
Which of the following is NOT a good tip for an entrepreneur who is making a business plan presentation?
Which of the following is NOT a good tip for an entrepreneur who is making a business plan presentation?
______ refers to the comparison of a company's performance against that of companies in the same industry, or against best practices, standards, or certification criteria.
Benchmarking
_______ distinguishes goods or services through a design, symbol, name, term, or other features.
Brand
Which of the following is NOT true of the inventory turnover ratio?
It measures the efficiency of your company's efforts to collect receivables
Which of the following is NOT true of common-sized statement analysis?
It provides detailed information about where your company stands relative to other industries.
Which of the following legal structures separates the owners from personal liability and provides a flexible allocation of profits and losses?
Limited liability company
Which of the following indicates a firm's ability to convert assets into cash?
Liquidity
According to the text, which of the following is the accurate description of how entrepreneurs create a business idea?
Listen; Observe; Analyze
Which of the following is a disadvantage of television advertising?
Long lead time
Identify the traditional production-distribution chain.
Manufacturer - wholesaler - retailer - consumer
Which statement is NOT true of market research?
Market research should only be conducted at the beginning of a venture.
________ refers to the joining of two companies in order to share their respective strengths.
Merger
Which of the following are models of a new product that will secure maximum customer feedback with minimal effort?
Minimum viable products
Which of the following is NOT typically found on the cover page of a business plan?
Mission statement
____________ refers to the remainder of revenues minus fixed and variable costs and taxes.
Net profit
Which of the following is NOT true of a nonprofit organization?
Nonprofit companies can sell stock to raise equity as needed.
Which of the following is NOT an example of an asset?
Notes payable
Which of the following BEST describes a small business?
One with fewer than 500 employees
_______ plans are short-term methods for achieving tactical goals.
Operational
Which of the following is NOT one of the factors in the marketing mix?
Personnel
Which of the following is shown on a balance sheet?
The value of the business to the owner
What is the future value of $1,200 invested at 5% a year for 10 years?
$1,956
Which type of research should you conduct when you need to ask questions specific to your product?
Primary
Something a person or entity devotes resources to in hopes of future profits or satisfaction is known as ______.
an investment
A success contract should achieve four aims, including contingencies. These contingencies will help the business _____.
avoid liability
______refers to everything a business does to keep the customer happy.
Customer service
Suppose you are looking at buying a company that is growing very quickly. What is the best way to value the company?
Future earnings
In which stage of the product life cycle do competitors begin to enter the market?
Growth
According to the text, which of the following is NOT a reason it is important for entrepreneurs to keep good records?
Having good records eliminates the need for the IRS to conduct an audit.
According to the text, which of the following is NOT one of the eight steps of a successful sales call?
Development
Which of the following is a share of a company's profits issued to shareholders, based on what remains after investments?
Dividends
According to the text, which is the best way to handle customer complaints?
Do not overreact to a negative comment.
Which of the following are operating efficiency ratios
Receivable turnover ratio and inventory turnover ratio
Which measurement of quality uses statistical methods to eliminate product defects?
Six Sigma
Which of the following statements regarding inventory is true?
Tight inventory control methods reduce waste, obsolescence, and spoilage
Which of the following Acts prohibits discrimination based on race, religion, sex, pregnancy, or national origin?
Title VII of the Civil Rights Act of 1964
A(n) _______ refers to discussing prior-experience examples to determine the fit of a prospective employee with the requirements of a position.
behavioral interview
The term used to refer to money making money and the essence of investment is ______.
compound interest
According to Jay Conrad Levinson's study of the furniture industry, ______ is the primary influence on buying patterns.
confidence in the product
A condition that must be met in order for something else to occur is known as a _______.
contingency
In business, "acts of God," such as an earthquake or a hurricane, are a common ____.
contingency in contracts
The selling price minus all variable costs is called the _______.
contribution margin
In addition to achieving profitability, social entrepreneurship _______.
has a goal of attaining beneficial returns for society
According to the text, the three ways of looking at earnings valuations are ______.
historical earnings, future earnings under current ownership, and future earnings under new ownership
When making a sales call, visualizing your product or service fulfilling a need will help you _____.
identify what the customer needs
In which category of a cash flow statement would money going into real estate expenses for the business be recorded?
investment
The free-enterprise system _________.
is based on voluntary exchange
Which of the following is included in the transformation and conversion step when converting inputs to outputs during operations?
labor
Changes made to adapt a rented property for a particular business are known as _______.
leasehold improvements
Mick Wood is considering buying a firm. Which method of valuation should he consider if he wants to identify the minimum value of the firm?
liquidation value
An official document that gives a party the right to hold a specific event is called a _____.
permit
The term used to describe the theft of inventory in a business is _____.
pilferage
______ refers to the one-time expense of opening a business
seed capital
________ refers to the percentage of value of an asset subtracted periodically to reflect the declining value of the asset.
Depreciation
What type of entity is formed with the intention of addressing social or other issues, with any profits going back into the organization to support its mission?
A not-for-profit organization
________ refer(s) to cash or items that can be quickly converted to cash or will be used within one year.
Current assets
As compared to its mission, a company's vision is typically ______.
broader and more comprehensive
Reading messages and getting a feel for discussions on a website, newsgroup, or the like, without participating in the online conversation, refers to _____
lurking
Zoning restrictions and environmental-impact issues are both factors in the ______ decision of where to locate
site
Which of the following words or phrases should you use when dealing with customers?
"Consider this"
A ____ is a decision-making process in which the costs of taking an action are compared to the benefits.
cost/benefit analysis
Bob started his company, Big Drain Excavations, last year. However, things have not gone well and Bob has been pushed into bankruptcy. Bob told you that the bank will be selling his assets, even though he would like to continue to try to save the company. Which type of bankruptcy is Bob going through?
Chapter 7
Nick, the owner of Be Smart! a new company that offers tutoring services to college students, wants his company to be more efficient. In particular, he wants to ensure that he and his employees are managing their time wisely. Which of the following should Nick do to improve time management?
Check emails only at the beginning, middle, and end of the day.
Which of the following supports the idea that placing your business near similar businesses will help generate interest in your business?
Clustering
Which of the following represent the rules and safeguards in place to ensure executives behave legally and ethically?
Corporate governance
Which of the following is/are NOT business-to-business sales promotional tools?
Coupons
Which of the following should be created as a strategic translation of your vision and mission into norms, values, and behaviors within the organization?
Culture
_________ refers to company-wide policies, practices, and processes that a business uses with its customers to generate maximum customer satisfaction and optimal profitability.
Customer relationship management
In which area of business can a small business outperform its larger competitor
Customer service
Which harvesting option makes sense if there is a goal of getting employees to be more committed to the company's success while planning for their retirement?
Employee stock ownership plan
Which of the following integrates finance, human resources, supply chain, manufacturing, and procurement into one system?
Enterprise resource planning
Which method of funding a business venture requires exchanging a share of the business for money?
Equity
________ refers to the amount of a bond to be repaid by the corporation or government at its maturity.
Face value
_____ uses location-decision criteria that are prioritized and weighted to eliminate subjective considerations in deciding where to locate a business.
Factor-rating
Which of the following takes place when you exchange the rights to the cash that will be collected in the future for immediate cash?
Factoring
Which of the following is an advantage of equity financing?
If the business does not make a profit, the investor does not get paid.
Which of the following would NOT typically be considered a start-up expense?
Installation of equipment and furniture
Which of the following can be used before interviewing a candidate to assist in developing questions about an applicant's knowledge, skills, abilities, and interests?
Interview guide
Your boss has asked you to make a presentation at the next company-wide meeting regarding inventory. One of the topics you need to address is how quickly inventory is moving. Which ratio should you use?
Inventory turnover ratio
Which of the following statements is NOT true of customer service?
Investing in customer service is likely to have a low return
Which of the following includes start-up money plus any money you or others contributed in the business in exchange for part ownership?
Investment
_________ advertising is designed to create awareness, interest, purchasing behavior, and post-purchase satisfaction for specific products and services.
Product
Which of the following types of legal structure does NOT pay taxes on profits?
S corporation
______ is a competitive process established by the United States Congress in 1987 to recognize quality management.
The Malcom Baldrige Award
Which of the following are federally supported investment companies administered by the Small Business Administration to provide debt or equity for companies that otherwise would not be able to obtain financing?
Small Business Investment Companies
Which of the following is the sale of goods or services with the dual goals of achieving profitability and attaining social returns?
Social entrepreneurship
Which of the following BEST defines a long-term asset?
Those that will take more than one year to use
Which of the following BEST represents the goal of customer relationship management?
To affirm that customer service is an aspect of marketing
What is the essence of good customer service?
To build positive relationships before and after a sale
Why should employers check references before hiring a candidate?
To learn more about their character and work performance
What is the first function of the cash flow statement?
To record all sources of income.
Which of the following do you NOT need in order to calculate net present value?
Total sales
Which statement about the present value of money is correct?
When prices rise, a dollar tomorrow will buy more than a dollar does today
The pace at which a company must spend capital before generating positive cash flow is referred to as the _______.
burn rate
The _________ is a financial report that shows the money coming into and going out of an organization.
cash flow statement
Credit extended by a company allowing qualified customers to make purchases up to a specified limit, without paying cash at the time of purchase refers to _______.
charge accounts
A drawback of the _____ style of leadership is that employees stop thinking and acting for themselves.
coercive
A person with the ______ style of leadership pressures people into doing what he or she wants
coercive
The ___ approach to a promotional budget is often used in highly competitive markets to prevent market-share loss.
competitive spending
The collection and analysis of data regarding target markets, industries, and competitors is known as ______.
market research
A group of consumers or businesses that have a similar response to a particular type of product or service is called a(n) _______.
market segment
